The deal might be closed at the time M&A transactions are completed however if the companies do not take the proper steps to integrate after the conclusion of the transaction, they could miss the value of the transaction. In all M&A activities the merger acquisition integration process is the most difficult and time-consuming to complete. A well-functioning, cohesive team, clear communications, and a solid strategy are all crucial to success.
Many of the challenges that companies encounter during integration could be avoided through pre-integration planning. For instance the integration of systems requires careful consideration of ownership of data as well as process synchronization issues. Additionally, IT solutions have to be designed early to allow the new firm to quickly gain benefits. Planning should start during due diligence, and the PMI Framework should be completed before the transaction is completed. The most important factor to PMI success is to determine and track important integration milestones to track progress and to concentrate on the goal of the transaction.
One common error in integration is to integrate too much, devaluing value by fundamentally altering aspects of the acquired company that made it attractive initially. Similarly, acquiring companies sometimes underestimate the duration it takes to successfully integrate a newly acquired company.
Another mistake made is not assessing the norms and culture in sufficient depth. Conflicts could arise if for instance, the cultures of two different companies are very different. To avoid problems the acquiring company could begin the evaluation at the due diligence phase by bringing key personnel from the target company to evaluate their work practices and culture. This is a useful method of predicting the kind of integration strategy which will be required after the deal is concluded.
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